UK - Some 1.5 million pension holders are planning to halt their pension contributions in an effort to stave off the effects of the impending recession, according to new research from AXA.
The AXA figures suggested that one in twelve pension holders felt they would be left with little choice but to stop pension contributions in the next two years, with 35-44 year olds most likely to cut saving.
The firm said many people feel pension holidays were an easy way to improve their disposable income with few tangible consequences.
However, the firm warned taking such action could result in severe long term repercussions that could affect the quality of life in retirement.
Steve Folkard, head of pensions and savings policy at AXA, said: "Taking a pension break should be a last resort because of the long term repercussions.
"If you put £300 (US$448) a month less into your pension for two years you will have a pension pot that is tens of thousands of pounds short when you retire."
Around half (53%) of those planning a pension break said they were doing so to offset the increased cost of living or to clear debts, with a further 13% blaming increased mortgage payments.
The firm's actuaries estimated a two-year break could cut a 25-year old man's occupational pension pot by £33,800 (US$50,450) when he retires.
A 35-year old would be worse off by £28,700 (US$42,835) and a 45-year old by £16,900 (US$25,233).
A 55-year old would suffer a £8,500 (US$12,687) drop in his occupational pension fund after a two-year break in contributions.
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